Humacyte, Inc 10-Q for FY2021 Q3

Humacyte, Inc. (HUMA)

10-Q 2021-11-15 For: 2021-09-30

Added on April 11, 2026

About this 10-Q

Humacyte, Inc filed this 10-Q on November 15, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $241K; down 73.6% from $914K a year earlier
Net loss: $31.56M; compared with a net loss of $17.76M a year earlier
Diluted EPS: -$0.72; compared with -$3.07 a year earlier

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incorporation or organization)		Identification Number)
Delaware (State or other jurisdiction of incorporation or organization)		85-1763759 (I.R.S. Employer Identification Number)

2525 East North Carolina Highway 54 Durham, NC (Address of principal executive offices)		27713 (Zip code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	HUMA	The Nasdaq Stock Market LLC
Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50	HUMAW	The Nasdaq Stock Market LLC


Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒


		Page No.

	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Condensed Consolidated Balance Sheets (unaudited)	1

	Condensed Consolidated Statements of Operations and Comprehensive Loss	2

	Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) (unaudited)	3

	Condensed Consolidated Statements of Cash Flows (unaudited)	4

	Notes to Condensed Consolidated Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38

Item 4.	Controls and Procedures	38

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3.	Defaults Upon Senior Securities	40

Item 4.	Mine Safety Disclosures	40

Item 5.	Other Information	40

Item 6.	Exhibits	41

SIGNATURES		43


	September 30,		December 31,
	2021		2020

ASSETS
Current assets
Cash and cash equivalents	$	240,449	$	39,929
Accounts receivable		240		113
Prepaid expenses		3,490		1,407
Total current assets		244,179		41,449

Finance lease right-of-use assets, net		21,947		23,492
Operating lease right-of-use assets, net		738		769
Property and equipment, net		36,499		40,978
Total assets	$	303,363	$	106,688

	September 30,		December 31,
	2021		2020
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	5,830	$	2,274
Accrued expenses		9,422		4,592
SVB loan payable, current portion		3,889		—
Finance lease obligation, current portion		1,915		1,729
Deferred payroll tax, current portion		145		145
Operating lease obligation, current portion		44		42
PPP loan payable, current portion		—		2,451
Total current liabilities		21,245		11,233

Contingent earnout liability		169,200		—
Finance lease obligation, net of current portion		21,627		23,090
SVB loan payable, net of current portion		14,038		—
Operating lease obligation, net of current portion		693		727
Common stock warrant liabilities		555		—
Deferred payroll tax, net of current portion		144		144
PPP loan payable, net of current portion		—		822
Total liabilities		227,502		36,016

Commitments and contingencies (Note 11)
Redeemable convertible preferred stock (Series A, B, C and D) $0.001 par value, 0 and 69,613,565 shares authorized as of September 30, 2021 and December 31, 2020, respectively; 0 and 69,613,562 shares outstanding as of September 30, 2021 and December 31, 2020, respectively; liquidation preference of $0 and $435,579 as of September 30, 2021 and December 31, 2020, respectively.		—		420,989

Stockholders' equity (deficit)
Preferred stock, $0.0001 par value; 20,000,000 and 0 shares designated as of September 30, 2021 and December 31, 2020; 0 shares issued and outstanding as of September 30, 2021 and December 31, 2020		—		—
Common stock, $0.0001 and $0.0001 par value as of September 30, 2021 and December 31, 2020, respectively; 250,000,000 and 340,216,780 shares authorized as of September 30, 2021 and December 31, 2020, respectively; 103,003,384 and 5,822,396 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively.		10		1
Additional paid-in capital		533,009		37,778
Accumulated deficit		(457,158)		(388,096)
Total stockholders' equity (deficit)		75,861		(350,317)
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)	$	303,363	$	106,688


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021			2020

Grant revenue	$	241	$	914	$	1,086	$	1,367

Operating expenses:
Research and development (includes related party expenses of $2 and $149 for the three months ended September 30, 2021 and 2020 and $168 and $462 for the nine months ended September 30, 2021 and 2020)		15,386		14,692		45,091		40,879
General and administrative		5,398		3,435		15,576		9,416
Total operating expenses		20,784		18,127		60,667		50,295
Loss from operations		(20,543)		(17,213)		(59,581)		(48,928)

Other expenses, net:
Interest income		3		2		6		277
Change in fair value of contingent earnout liability		(9,768)		-		(9,768)		—
Interest expense		(1,204)		(549)		(2,952)		(1,661)
Transaction costs expensed		(49)		—		(49)		—
Change in fair value of common stock warrant liabilities		(2)		—		(2)		—
Gain on PPP loan forgiveness		—		—		3,284		—
Total other expenses, net		(11,020)		(547)		(9,481)		(1,384)
Net loss and comprehensive loss	$	(31,563)	$	(17,760)	$	(69,062)	$	(50,312)

Net loss per share attributable to common stockholders, basic and diluted	$	(0.72)	$	(3.07)	$	(3.69)	$	(8.74)
Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted		43,950,856		5,788,130		18,728,471		5,755,418


	Redeemable Convertible
	Preferred Stock			Common Stock			Additional		Accumulated		Total Stockholders'
	Shares	Amount		Shares	Amount		Paid-in Capital		Deficit		(Deficit) Equity
Balance as of December 31, 2020	69,613,562	$	420,989	5,822,396	$	1	$	37,778	$	(388,096)	$	(350,317)
Proceeds from the exercise of stock options	—		—	116,149		—		206		—		206
Stock-based compensation	—		—	—		—		2,528		—		2,528
Issuance of warrants in conjunction with debt	—		—	—		—		2,360		—		2,360
Net loss	—		—	—		—		—		(20,301)		(20,301)
Balance as of March 31, 2021	69,613,562	$	420,989	5,938,545	$	1	$	42,872	$	(408,397)	$	(365,524)
Proceeds from the exercise of stock options	—		—	5,204		—		30		—		30
Stock-based compensation	—		—	—		—		2,930		—		2,930
Net loss	—		—	—		—		—		(17,198)		(17,198)
Balance as of June 30, 2021	69,613,562	$	420,989	5,943,749	$	1	$	45,832	$	(425,595)	$	(379,762)
Conversion of redeemable convertible preferred stock into common stock in connection with the Merger and related PIPE financing	(69,613,562)		(420,989)	69,613,562		7		420,982		—		420,989
The merger and related PIPE financing, net of transaction costs and acquired liabilities	—		—	27,346,449		2		209,478		—		209,480
Public warrants assumed upon the merger, net of transaction costs	—		—	—		—		13,912		—		13,912
Contingent earnout liability recognized upon closing of the reverse recapitalization	—		—	—		—		(159,432)		—		(159,432)
Proceeds from the exercise of stock options	—		—	99,624		—		360		—		360
Stock-based compensation	—		—	—		—		1,877		—		1,877
Net loss	—		—	—		—		—		(31,563)		(31,563)
Balance as of September 30, 2021	—	$	—	103,003,384	$	10	$	533,009	$	(457,158)	$	75,861


	Revenue								Accounts Receivable
	Three Months Ended September 30,				Nine Months Ended September 30,				September 30,		December 31,
	2021		2020		2021		2020		2021		2020
Grant A	—		—		—		—		—		—
Grant B	—		0	%	—		11	%	—		—
Grant C	100	%	68	%	100	%	65	%	100	%	100	%
Grant D	—		30	%	—		20	%	—		—
Total	100	%	98	%	100	%	96	%	100	%	100	%


	Shares
Common stock of AHAC, outstanding prior to Merger	10,355,000
Less redemption of AHAC shares	(3,008,551)
Common stock of AHAC	7,346,449
AHAC Founder Shares	2,500,000
New Humacyte shares issued to PIPE Investors	17,500,000
Issuance of common stock upon reverse recapitalization and PIPE Financing	27,346,449
New Humacyte shares issued in Merger to Legacy Humacyte stockholders	75,656,935	(1)
Total shares of common stock immediately after Merger	103,003,384


	Fair Value Measured as of September 30, 2021
($in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	238,375	$	—	$	—	$	238,375
Total financial assets	$	238,375	$	—	$	—	$	238,375
Liabilities:
Contingent earnout liability	$	—	$	—	$	169,200	$	169,200
Common stock warrant liabilities (Private Placement Warrants)		—		—		555		555
Total financial liabilities	$	—	$	—	$	169,755	$	169,755

	Fair Value Measured as of December 31, 2020
($in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	35,623	$	—	$	—	$	35,623
Total financial assets	$	35,623	$	—	$	—	$	35,623


	Contingent		Private Placement
($in thousands)	Earnout Liability		Warrants

Fair value as of December 31, 2020	$	—	$	—
Private placement warrant liability acquired as part of the merger		—		(553)
Contingent earount liability recognized upon the closing of the reverse recapitalization		(159,432)		—
Change in fair value included in other (expense) income		(9,768)		(2)
Fair value as of September 30, 2021	$	(169,200)	$	(555)


	September 30,		December 31,
($ in thousands)	2021		2020

Scientific equipment	$	27,578	$	27,412
Computer equipment		154		149
Software		335		335
Furniture and fixtures		988		988
Leasehold improvements		26,355		26,355
		55,410		55,239
Accumulated depreciation		(18,911)		(14,261)
Property and equipment, net	$	36,499	$	40,978


Year ending December 31:	($ in thousands)
2021 (remainder)	$	—
2022		5,555
2023		6,667
2024		6,667
2025		1,111
Total future payments		20,000


		September 30,
		2021
Common stock reserved for Contingent Consideration Shares		15,000,000
Exercise of options under stock plans		6,399,888
Issuance of options under stock plans		7,730,503
Shares available for grant under ESPP		1,030,033
Warrants to purchase common stock		5,465,204
		35,625,628


	Legacy
	Humacyte
	Common Stock	Private Placement		Total Common
	Warrants	Warrants	Public Warrants	Stock Warrants

Outstanding as of December 31, 2020	32,961	—	—	32,961
Common Stock Warrants issued to SVB	287,704	—	—	287,704
Common Stock Warrants as Part of the Merger	—	177,500	5,000,000	5,177,500
Warrants Exercised	(32,961)	—	—	(32,961)
Oustanding as of September 30, 2021	287,704	177,500	5,000,000	5,465,204


	September 30,			August 26,
	2021			2021
Market price of public stock	$	11.61		$	10.96
Exercise price	$	11.50		$	11.50
Expected term (years)		4.91			5.00
Expected share price volatility		28.5	%		32.5	%
Risk-free interest rate		0.96	%		0.68	%
Estimated dividend yield		0	%		0	%


	September 30,			August 26,
	2021			2021
Current stock price	$	11.61		$	10.96
Expected share price volatility		78.9	%		79.6	%
Risk-free interest rate		1.55	%		1.34	%
Estimated dividend yield		0.0	%		0	%
Expected term (years)		10.00			10.00


	Three Months Ended September 30,			Nine Months Ended September 30,
	2021 (1)	2020		2021		2020

Estimated dividend yield	—	0	%	0	%	0	%
Expected share price volatility (weighted average and range, if applicable)	—	91.6	%	91.4% (91.0% to 92.1%)		91.4% (89.4% to 91.6%)
Risk-free interest rate (weighted average and range, if applicable)	—	0.34	%	0.68% (0.62% to 1.02%)		0.40% (0.34% to 0.75%)
Expected term of options (in years)	—	6.0		6.0		6.0


				Weighted
				Average
		Weighted		Remaining	Aggregate
		Average Exercise		Contractual Term	Intrinsic Value
	Number of Shares	Price Per Share		(years)	(in thousands)
Options outstanding at December 31, 2020	4,813,262	$	6.04	6.6	$	20,422
Granted	1,838,029	$	10.28
Exercised	(188,006)	$	2.97
Forfeited	(63,397)	$	7.87
Options outstanding at September 30, 2021	6,399,888	$	7.33	6.6	$	26,705
Vested and exercisable, September 30, 2021	4,092,342	$	5.74	5.1	$	23,345
Vested and expected to vest, September 30, 2021	6,399,888	$	7.33	6.6	$	26,705



	Three Months Ended September 30,				Change
($in thousands)	2021		2020			$	%
Revenue	$	241	$	914		(673)	(74)	%

Operating expenses:
Research and development		15,386		14,692		694	5	%
General and administrative		5,398		3,435		1,963	57	%
Total operating expenses		20,784		18,127		2,657	15	%
Loss from operations		(20,543)		(17,213)		(3,330)	(19)	%
Other expenses, net
Change in fair value of contingent earnout liability		(9,768)		—		(9,768)	100	%
Interest expense		(1,204)		(549)		(655)	(119)	%
Other (expenses) income, net		(48)		2		(50)	—
Total other expense, net		(11,020)		(547)		(10,473)	—	%
Net loss	$	(31,563)	$	(17,760)	$	(13,803)	(78)	%


			Less than 1						More than 5
($in thousands)	Total		year		1 - 3 years		3 - 5 years		years
Contractual obligations:
Finance leases	$	33,952	$	950	$	7,833	$	8,232	$	16,937
Operating leases		1,126		26		210		210		680
SVB loan payable		23,980		5,336		14,813		3,831		—
Noncancelable purchase commitments (1)		12,411		12,411		—		—		—
Total contractual obligations	$	71,469	$	18,723	$	22,856	$	12,273	$	17,617


Exhibit Number		Description
3.1		Second Amended and Restated Certificate of Incorporation of Humacyte, Inc. (incorporated by reference to Exhibit 3.1 to Humacyte, Inc.’s Current Report on Form 8-K, filed with the SEC on August 27, 2021).

3.2		By Laws of Humacyte, Inc. (incorporated by reference to Exhibit 3.2 to Humacyte, Inc.’s Current Report on Form 8-K, filed with the SEC on August 27, 2021).

4.1		Form of Subscription Agreement (incorporated by reference to Exhibit 10.3 to Humacyte, Inc.’s Registration Statement on S-4/A, filed with the SEC on August 2, 2021).

4.2		Form of Investor Rights and Lock-up Agreement (incorporated by reference to Exhibit 4.3 to Humacyte, Inc.’s Current Report on Form 8-K, filed with the SEC on August 27, 2021).

4.3		Form of Lock-up Agreement (incorporated by reference to Exhibit 10.1 to Humacyte, Inc.’s Registration Statement on S-4/A, filed with the SEC on August 2, 2021).

10.1		Humacyte, Inc. 2021 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 to Humacyte, Inc.’s Current Report on Form 8-K, filed with the SEC on August 27, 2021).

10.1.1		Form of Stock Option Agreement under Humacyte, Inc. 2021 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4.1 to Humacyte, Inc.’s Current Report on Form 8-K, filed with the SEC on August 27, 2021).

10.2		Humacyte, Inc. 2021 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.5 to Humacyte, Inc.’s Current Report on Form 8-K, filed with the SEC on August 27, 2021).

10.3		Humacyte, Inc. Annual Bonus Plan (incorporated by reference to Exhibit 10.8 to Humacyte, Inc.’s Current Report on Form 8-K, filed with the SEC on August 27, 2021).

10.4		Form of Indemnity Agreement by and between Humacyte, Inc. and each of its directors and executive officers (incorporated by reference to Exhibit 10.23 to Humacyte, Inc.’s Registration Statement on S-4/A, filed with the SEC on July 1, 2021).

31.1*		Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*		The following materials from Humacyte, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline XBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets (unaudited), (ii) Condensed Consolidated Statements of Operations and Comprehensive Loss, (iii) Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) (unaudited), (iv) Condensed Consolidated Statements of Cash Flows (unaudited), (v) Notes to Condensed Consolidated Financial Statements, and (vi) Cover Page.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


	HUMACYTE, INC.

Date: November 12, 2021	By:	/s/ Laura E. Niklason, M.D., Ph.D.
		Name:	Laura E. Niklason, M.D., Ph.D.
		Title:	President and Chief Executive Officer

	By:	/s/ Dale A. Sander
		Name:	Dale A. Sander
		Title:	Chief Financial Officer, Chief Corporate Development Officer and Treasurer